(Bloomberg) — Rising cases of bird flu in humans are prompting investors to buy stocks in vaccine developers. This is a familiar setup for industry veterans who have witnessed trading frenzy in the past at the first signs of an outbreak.
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Shares of CureVac NV, which has a bird flu vaccine in early testing, jumped 15% on Wednesday as concerns grew over a possible outbreak of bird flu in humans following the announcement of a new case in Australia. Novavax Inc. – which recently touted plans to explore a bird flu vaccine – closed for the third day at its highest level since December 2022.
Shares of Moderna Inc. rose 2.9% in after-hours trading, while those of Pfizer Inc. gained 1.4% following a report that the companies were in talks with the US government regarding the development of avian flu vaccines. Moderna and fellow Covid shot maker BioNTech SE posted double-digit gains in regular trading, while Pfizer rose 3.6%.
Read more: Second human bird flu infection in US reported in Michigan
“Bird flu is giving momentum to stocks that were already rising,” said Jared Holz, a health care specialist at Mizuho. “A lot of it is probably just big picture thinking – more retail-driven trading in the wake of these headlines linking the problems happening with bird flu to vaccine stocks. »
Past epidemics like Ebola, Zika and monkeypox have caused similar fluctuations – especially for smaller players – as companies come out on top to tout their vaccine or treatment plans. Day trader chat rooms search for potential winners, but only a handful could possibly emerge – if at all – with successful treatments. Even fewer stocks end up becoming household names like Moderna or BioNTech.
So far, the stock reactions have been “pretty extreme,” Holz said. He recommended selling the company because it’s not yet clear whether the disease will spread or impact revenue, although “the story is definitely gaining momentum.”
Read more: US bird flu surveillance gets $100 million in funding
Many vaccine names had jumped before the newly reported case. Novavax shares have soared since it signed a licensing deal with Sanofi – and revealed its bird flu plans – two weeks ago. A rally in Moderna shares began after a recent patent victory against Pfizer.
–With help from Matthew Griffin.
(Updates with after-hours trading.)
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